Looking for tech business veterans and consultants? They are just a few clicks away.

Digital Product Development: Step-By-Step Guide For Startups

Oct 7, 20218 min read

Robert Krajewski

Co-founder and CEO of Ideamotive. Entrepreneur, mentor and startup advisor.

digital product development

Today, the growth of technology is tremendous, and businesses try to keep pace with this fast-paced world and introduce new digital products. There are 305 million startups created every year, and since 2007, the number of tech startups has increased by up to 47%. However, founders of startup companies face plenty of challenges on their way to success. Many fail to operate for at least a year, and statistics show that their number amounts to over 20%. We analyzed the most widespread mistakes and made a guide that will be helpful for any entrepreneur and startup developer. Among common issues, we can distinguish: 


infographic 2- Main Challenges Faced By Startups

The latter challenge can be easily managed with agile software developers, and any project is doomed to success.  


In this article, we will answer the principal question that bothers all startup developers, and provide an extensive explanation of all digital product development stages. We will lead you along the development way, beginning with a startup idea and an actual product. You’ll find why it’s essential not to deviate from the set course and be attentive to details to avoid obstacles. 


We’ve also prepared an infographic illustrating all steps of digital product development. You can download it for free, so it’d guide you through the process.


infographic Step By Step Guide For Startups

#1 Conduct Profound Research: Strategy Creation Phase 

Define Your Unique Selling Proposition

In order to build a successful venture, first of all, you need to identify the degree to which your digital product satisfies market demand. It must be something brand new and helpful for dealing with a particular issue. So your task is to determine the problem your product will solve. 

Analyze Trends

Take into account that this innovation must bring use either to a specific group of people or to anyone. Creating a unique selling proposition requires research of current trends. This aspect is paramount for product development as you’ll get to know people’s preferences and needs.

Identify Main Risks

The discovery stage enables a developer to uncover possible risks before committing resources. The goal of this stage is to immerse in the user world and learn their key demands. Discover customers’ mindset as much as you clearly see the outlines of the future product. Finally, you will see that one or two problems bother more and more respondents, so it's time to move to the next stage and conceptualize the idea. 

#2 Conceptualize Your Idea: Strategy Creation Phase 

This pre-development stage of digital product development requires your creativity and focused team effort. During this phase, you will have to come up with an idea of your future product and evaluate it. Collaboration with the team is essential for excellent outcomes as you think over all aspects of the project, its pros, and cons, as well as resources and budget. 


The best way would be to brainstorm possible solutions as this technique enables people to think outside the box. The product conceptualization contributes to seeking efficient decisions to the problem identified in the discovery stage. The list of possible ways to deal with the issue will be wider, and chances to choose the proper one multiply. 


There are many other effective techniques for managing the game-changing features of a product. You can resort to prototyping and creating a storyboard as well to make the work process more productive and versatile. Your team may generate a plethora of ideas, and you have to evaluate which of them work the best. Rate them and select a creative, cost-effective solution that aligns with the company's objectives. 

#3 Test Your Idea: Validation Phase 

At this stage, use the lean validation process that focuses on optimization of engineering, design, and production. It allows you to evaluate the possibility of manufacturing the digital product on a wide scale. So here are some aspects that a startup developer needs to consider during the validation process:

how to validate business idea


Execute the validation of your hypotheses that basically includes customer interviews, focus groups, and validating any user experience insights. Thus, you will see the real necessity in your innovation. Pay attention to customers’ viewpoints and the important metrics like price, usability, functionality, and quality. Opinion polls of potential customers assist you to identify if the product is viable. Understanding target users’ expectations lead to project enhancement and the possibility to reach product-market fit.

#4 Create Prototypes: Digital Product Design Phase 

Now it's time to move to creating extensive models and testing them. Here you should see how two prototypes: design and engineering merge. With Ideamotive’s experts, you will benefit from a smooth and swift prototyping process until the product meets the highest standards. 

Select the IT Engagement Model

During this stage, you should decide where you’ll be hiring an in-house development team or outsourcing the development process. While the first approach gives you more control over the product development, the second one allows you to benefit from the industry-relevant experience of the outsourcing vendor as well as save the budget. If you choose to outsource, Ideamotive Talent Network is what you need! It unites hundreds of talented engineers, designers, analysis, QA professionals, product managers, and other experts who would be able to deliver services of the highest possible quality. 


We use Agile methodology which has numerous advantages over the Waterfall approach as it is less prone to errors and more flexible, allows more client involvement, provides more room for changes and additions, and results in a more predictable final product

Work on UX/UI

At the digital product design phase, you introduce UX and UI for their visual implementation for the first time. However, you cannot see the final result as the functionality of your product is limited at the prototyping stage. But you still see possible issues and have the possibility to attract investors and potential users. 

This process can be outlined to the following set of actions: your turn sketches into wireframes; narrow down prototypes to MVP (Minimum Viable Product) and then turn it into a final product. You should take into account that MVP development is crucial for improving product UX, UI, and functionality. 

Pivot Test the Product

An essential part is pilot testing of a product that allows developers to improve it and prepare for alfa/beta releases. You look at your creation from the end user’s perspective that plays a big part in project success. With Quality Assurance you test performing activities of your digital product to remove defects and bugs. 

Perform Alfa Deployment

When pilot testing is over it's time to perform alfa deployment during which users test the functionality and design of a product. Beta releases presuppose collecting user feedback that you can further make public. Thus, the audience will have a clear picture of what to expect from your product. 


With our business strategists the product prototyping, testing, and releases will be performed at the highest level. Entrepreneurs will have their data analyzed and issues dealing with will be kept under strict control.

#5 Launch the MVP: Development Phase 

This stage of digital product development is pivotal, and it shows what effect your product makes on the target audience. Here you can see whether it was cost-effective to invest this or that amount of effort and time in a product. 

Ensure the Adherence of the Development Process to the Plan

So how to achieve a high-profile launch and ensure a quality product with no bugs? It may seem impossible for startup developers, but we know how to put your MVP on the market and get impressive results. Firstly, consider supervising a product engineering process by a project manager. Thus, the design, development, and test will be kept within budget and delivered on time. In the Ideamotive Talent Network, you can find professional IT product managers who will ensure the effectiveness of your digital product. 

Calculate the Product’s Profitability

Here it’s time to resort to business analysis and estimate its profitability and possible expenditures for launch and promotion. Get rid of wasteful ideas as they lead to unnecessary costs, and help from a business analyst will be just beneficial. You should clearly understand the selling price of the product, as well as its minimum metric to calculate potential risks. Moreover, at this point, be prepared to give a set amount of money needed to cover marketing costs. Sales volume expectation is a must for a killer business strategy. 

Implement Your Product Marketing Strategy

Once the innovation proved its profitability and sowed a long lifespan on the market, it’s time to move to develop a product marketing strategy. This stage entails the collaboration of several teams, so product managers and marketers should work hand in hand. You need to have a clear product vision and be ready to present it to the world in the best possible way. 


Define which position your product will occupy in the existing market. The best solution is a pre-launch strategy to prepare the audience for new product releases and make them excited. It consists of the following elements: landing page, content strategy, link building, recruiting influencers, powerful promo video, social media presence, PR kit, SEO strategy. There should be no challenges if you've conducted the validation phase properly that includes the state of the market and consumers' expectations discovery. 

#6 Conduct Post-Launch Review and Start Scaling: Growth Phase 

Once you have completed the digital product development, it’s important to perform a post-launch review to measure your success. There’s nothing unfavorable if your product has some drawbacks as the world was not made in a day and there should always be space for growth. 

Enhance the Product According to User Feedback

In order to stay competitive, you should constantly enhance your digital product and expand your reach. A good DPD process provides all future enhancement will not pose many difficulties due to smart design and development practices. Designing product changes or, in other words, “fighting churn with data” as the popular book title says allows your product to reach new heights. Here it’d be great to ask your clients once again and analyze their feedback and experience. 

Analyze Crucial Metrics

A startup developer’s focus is to support more users while optimizing to accelerate growth. Now you can see that the post-launch review aims not only at learning and communication, but also keeps the company looking forward. Data you obtain propel your team to future success and inspire them to work harder to correspond to high expectations.


But how to see that your product is a real success and you should continue developing in this course? Here are tested metrics for estimation a digital product success: 

  • Word of mouth: this metric for success measuring means you created a meaningful connection with your customers. People talk about the product and encourage others to benefit from your innovation. Advertising campaigns are the most efficient ways to influence purchasing decisions and result in users’ direct experience with a product.
  • Engagement: it’s essential to see how people interact with your product to measure its success. There are several ways to track engagement, such as product download and usage, return user frequency, and monthly active users. 
  • Sign-up: here you can see how many people subscribed to obtain new data on your product and its updates. It shows their interest and willingness to continue using the digital product for a long time. 
  • Active, paying users: the product is a real success if people actively use it and are ready to pay for additional functionalities you suggest. Getting profit from a project is an indication of great results. 
  • CAC (client acquisition cost): Here you can measure how much you pay on the acquisition of a new customer and a low cost is a sign of success. 
  • CLV (client lifetime value): this metric helps a company to calculate income it will get from a relationship with a client from its beginning till the end.
  • Churn rate: the lower this rate is the better since it shows the number of people who stopped using the product. 

Don’t Forget About Product Maintenance

Take into consideration a very important aspect of digital product development that is quite often neglected. It’s the maintenance and support you regularly provide to your product users. It doesn’t look attractive as it requires additional workforce, time, and money, but hearing and helping people who chose you is vital for a powerful presence of a project in the market. 

Make sure that your company has enough resources to fix bugs after the launch. A great solution would be to make an agreement with an external company providing post-launch support services. But for a startup enterprise, it'd be sufficient to create a special maintenance team within the organization. 

Enter the Growth Stage

If analysis of crucial metrics illustrates the fact that the product is of great interest to users and if you have enough resources to maintain its high quality, you can start scaling your marketing budgets. Plan your expansion strategy by defining how exactly you are going to enlarge your user base and expand to other geographics.

Digital Product Development: Final Thoughts

With digital product development on the rise, startupers should stick to a well-elaborated plan of action to avoid undesirable risks. Here you have got acquainted with the guide consisting of six stages for a successful project building. Sticking to these phases, you will be able to enter the market with a decent product. 

Every stage explains needed actions and possible risks you manage to prepare for and eliminate. It’s vital to understand your audience, goals, market, budget, and conduct a lot of research and testing to step up your game. 


Do you find it challenging to work for the first time? Is successful product development your desired goal, but there’s a lack of experience that stops you? We have a solution! You can find all the needed professionals in Ideamotive Talent Network. Feel free to contact us, and we’ll form a team of top developers, designers, analysts, QA engineers, and product managers that would ensure a flawless development process. 


The outsourcing report illustrates the power of offshore development, so start your product launch right now and benefit from impressive outcomes!

Robert Krajewski

Robert is a co-founder of Ideamotive. Entrepreneur, who with passion spreads digital revolution all around the internet. Mentor and advisor at startup accelerators. Loves to learn and discover new business models.

View all author posts
digital marketplaces03

Digital Marketplace Development Guide

How To Start Online Marketplace Business In 2021?

Read now
Newsletter 9-1
Ideamotive Newsletter
Your bi-weekly collection of hottest tech news

Looking for business experts to join your team?

There are dozens of vetted business professionals in our talent network.